Caesarstone Ltd.

Greetings and welcome to the Caesarstone third quarter 2023 earnings conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. To ask a question, you may press star then one on your touchtone phone. To withdraw from the question queue, please press star then two. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Brad Cray, Investor Relations. Thank you. You may begin.

Thank you, operator, and good morning to everyone on the line. I am joined by Yoshaan, Caesarstone's chief executive officer, and Nahum Throst, Caesarstone's chief financial officer. Certain statements in today's conference call and responses to various questions may constitute forward-looking statements. We caution you that such statements reflect only the company's current expectations and that actual events or results may differ materially. For more information, please refer to the risk factors contained in the company's most recent annual report on Form 20-S and subsequent filings with the SEC. In addition, on this call, the company will make reference to certain non-GAAP financial measures, including adjusted net loss income, adjusted net loss income per share, adjusted gross profit, adjusted EBITDA, and constant currency. The reconciliation of these non-GAAP measures to the most directly comparable GAAP measures can be found on the company's third quarter 2023 earnings release, which is posted on the company's investor relations website. Thank you, and I would now like to turn the call over to Yos. Please go ahead.

Thank you, Brad. Good day, and thank you, everyone, for joining us to discuss our third quarter results. I will discuss our business activity and whom we'll then cover additional details regarding our financial results before we open the call for questions. I would like to start by expressing that we are saddened by the horrific acts of vicious violence and terror that have occurred in Israel on October 7th. We are confident that Israel will not only prevail, but will also exercise justice towards all who were involved in committing these heinous crimes. Our thoughts are with our employees, customers, and others impacted by these events. We are focused on business continuity and our global operations are running smoothly with no material impact to our strategy, Israeli production, and our overall ability to continue serving customers globally. The one aspect impacted is the market in Israel, which accounted for about 5% of our revenues in the third quarter. We remain committed to supporting the people of Israel and the rehabilitation of our affected townships, and we have decided to donate 2,000 kitchen surfaces to families in the south of Israel whose homes have been lost or damaged during the war, in addition to other supporting activities. Now, we will move to our third quarter results. We generated our third straight quarter of robust cash flow from operations adding $28.2 million to our real-to-date total of just over $53 million. We maintained our sharp focus on executing further against our global restructuring actions. Our results improved sequentially as we moved through the quarter. At the same time, we made significant progress with the implementation of various initiatives under our strategic plans to better utilize our resources, improve our cost structure, realign our workforce, and optimize our production footprint. In regards to production optimization, we are on schedule in transitioning production of floor price point SQs to our strategic network of third party manufacturers. We have now transitioned a significant portion of our production and expect roughly 40% of our products to be sourced by the end of the year. In addition, we are reaping the initial margin benefits from the closure of our Stotia manufacturing facility, which we completed during the second quarter of this year. In line with this progress, we produced significant sequential recovery in our third quarter adjusted gross margin to 19.8%. With this operating improvement translating into positive adjusted EBITDA of $1.9 million. Concurrently, we are navigating through complex market dynamics, including a competitive landscape, challenging global economic conditions, and softer trends in renovation and remodel activity across our global footprint. We are working through this challenging environment with an aim to drive higher sales. We are addressing our pricing structure, investing prudently in sales and marketing, and elevating our R&D efforts, to create an exciting area of innovative collections that are on track to launch in the coming months. Now I would like to take a moment to comment on recent developments in our Australian market. SafeWork Australia, an Australian government statutory agency, recently made its report about engineered stone publicly available. This report recommends that the Australian government adapt a ban on engineered stone. The recommendation is pending federal and state government decisions on next steps. At this time, it is difficult to predict exact outcome of the Australian government's decision on the matter and whether the ultimate decision will be a total ban, partial ban, or other. We are working diligently with our strong Australian team to maintain our market share in this market regardless of the decision. In conclusion, I am proud of our team and the work that was done this past quarter, both in terms of profitability improvements and restructuring actions. I am confident we are moving in the right direction to transform our business. We now have a much stronger balance sheet that we can leverage to execute our strategy and create value. Thank you, and I will now turn the call over to Nahum to walk through the details of our financial performance.